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A Good Article For TFSA 'Newbies'
June 16, 2023
2:00 pm
Dean
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.
This article also makes for a good review for us TFSA 'Veterans' sf-wink . . .

Note:
In classic BNN form, the old video above the article is not directly related.

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

June 16, 2023
2:28 pm
Tommy Tutalidge
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Dean said
.
This article also makes for a good review for us TFSA 'Veterans' sf-wink . . .

Note:
In classic BNN form, the old video above the article is not directly related.

    Dean

  

Not exactly for newbies but for gamblers who hit big in their TFSA Revenue Canada deems it as running a business and from what I've seen its not how many trades you make its how many times you multiplied your gains. Example you make $650,000 off of $6,500 in a penny stock they nail you. So the line about all the trades and a business from what I've seen are not true. In their eyes you got too lucky and they want more money from you.

June 16, 2023
5:43 pm
savemoresaveoften
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Tommy Tutalidge said

Not exactly for newbies but for gamblers who hit big in their TFSA Revenue Canada deems it as running a business and from what I've seen its not how many trades you make its how many times you multiplied your gains. Example you make $650,000 off of $6,500 in a penny stock they nail you. So the line about all the trades and a business from what I've seen are not true. In their eyes you got too lucky and they want more money from you.  

What you said is totally not true,

June 17, 2023
2:17 pm
Norman1
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June 17, 2023
4:35 pm
fat_dog
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Is it not better to keep the investment in your portfolio . That earn interest income in TFSA and RRSP . And keep investment that earn capital gains and divided end out side of these accounts because both capital gain and dividends ends . Get preferred tax treatment

June 17, 2023
11:41 pm
Norman1
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The preferred tax treatment of capital gains and dividends is not zero taxation.

It is better to tax shelter the higher return of the capital gains and dividends from stocks and pay the taxes on the lower return from GIC's and savings accounts.

June 18, 2023
8:02 am
fat_dog
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It is best to pay the lowest amount of money to the tax department .
And keep the most .

I think you are ignoring the complexity of the tax law .
Do you fill in your own tax return ? Preferable by hand . On paper . that it is easier to see the advantages of different types of income .

This could go on a long time with you saying just the opposite of me
this is what makes a market . And the market will sort out who is right . Good luck

June 18, 2023
9:33 am
Norman1
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I actually know how capital gains, dividends, and interest are taxed.

I also understand that it is poor tax planning to expend TFSA and RRSP contribution room to shield the 3% to 4% interest and 0% capital gains from GIC's and bonds from taxes while leaving the 5% to 6% dividends and the future capital gains from a utility stock exposed to taxation.

Knowing how different kinds of investment gains are taxed is not enough. That superficial analysis leads to myths like keeping dividends and capital gains outside an RRSP is better than having them in an RRSP. The full lifetime calculations show that myth is not really the case.

June 18, 2023
11:41 am
Dean
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.
From what I understand, these are the most common Mistakes TFSA
'Newbies' make . . .

    #1. 'Not' having a TFSA. Sadly not everyone can, or is interested.
    #2. Having a TFSA in a loser, low-interest savings account.
    #3. Recontributing withdrawals in the same calendar year.
    #4. Not keeping a good/accurate TFSA account(s) record.
    #5. Assuming TFSA's are only for short-term savings goals.
    #6. Over/Under contributing.

.
FWIW ... I think one Biggest mistakes the government made with the TFSA program, was the Name they gave it. In my mind, it should have been called 'TFIA' (Tax Free Investment Account).

My Two Nickels,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

June 18, 2023
11:52 am
fat_dog
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Norman1 said
I actually know how capital gains, dividends, and interest are taxed.

I also understand that it is poor tax planning to expend TFSA and RRSP contribution room to shield the 3% to 4% interest and 0% capital gains from GIC's and bonds from taxes while leaving the 5% to 6% dividends and the future capital gains from a utility stock exposed to taxation.

Knowing how different kinds of investment gains are taxed is not enough. That superficial analysis leads to myths like keeping dividends and capital gains outside an RRSP is better than having them in an RRSP. The full lifetime calculations show that myth is not really the case.  

It great you know how capital gain and dividends are taxed . But as they say every thing you see on the internet might not be true !

And I am sure their are many calculator on the internet that say many things for many reason .

You needed to do the calculation yourself . Not depend on online calculator to do so

Like have tax software to do you taxes . You do not really know the formulas used to calculations tax

These kind of differences between working it out yourself . Or finding some calculator that
gives you the answer you like

The diffuseness between us is what makes a market . Once again good luck

June 18, 2023
12:14 pm
cgouimet
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fat_dog said

It great you know how capital gain and dividends are taxed . But as they say every thing you see on the internet might not be true !

And I am sure their are many calculator on the internet that say many things for many reason .

You needed to do the calculation yourself . Not depend on online calculator to do so

Like have tax software to do you taxes . You do not really know the formulas used to calculations tax

These kind of differences between working it out yourself . Or finding some calculator that
gives you the answer you like

The diffuseness between us is what makes a market . Once again good luck  

Say what? There are lies on the internet? Shocking! 🙂

CGO
June 18, 2023
1:56 pm
savemoresaveoften
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fat_dog said

It great you know how capital gain and dividends are taxed . But as they say every thing you see on the internet might not be true !

And I am sure their are many calculator on the internet that say many things for many reason .

You needed to do the calculation yourself . Not depend on online calculator to do so

Like have tax software to do you taxes . You do not really know the formulas used to calculations tax

These kind of differences between working it out yourself . Or finding some calculator that
gives you the answer you like

The diffuseness between us is what makes a market . Once again good luck  

I have not done my tax using pen and paper for the last decade plus, and yet I understand how different investment are being taxed. Whether doing a tax return manually or not is irrelevant to one's understanding of our tax system.

There is no one sure win investment allocation between registered vs non registered account. Unless you know with 100% certainty how the rest of your life will look at, which includes life expectancy, health issues, investment return, employment profile, CPP changes, OAS changes etc etc. Its way more complicated than the simple interest income being 100% taxable, capital gain and dividend have preferential tax treatment that you seem to solely focus on.

June 18, 2023
3:04 pm
fat_dog
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It is more “ complicated “ than “It is better to tax shelter the higher return of the capital gains and dividends from stocks and pay the taxes on the lower return from GIC's and savings accounts. “

your words but the fact is

that dividend and capital gain . Get preferential tax treatment . Out side a rrsp and tfsa . That interest income dose not that is a fact

June 18, 2023
7:54 pm
Wrayzor
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fat_dog said
... the fact is

that dividend and capital gain . Get preferential tax treatment . Out side a rrsp and tfsa . That interest income dose not that is a fact  

So you'd rather pay tax on a 20% capital gain than on a 5% interest payment?

June 18, 2023
9:14 pm
fat_dog
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Well let just keep on going .

I would rather get the largest after tax return

and we can go on like this all day .

It is my understanding that a person can have multiple Handel on the board . So it may look
like a different members . is that the case with you ?

They say that if you are not paying for some thing on the internet you are the product

are you an advertiser . Do you benefit from theses myth . you propagate ?

It just that it is hard to watch fake news . Or self serving advice for advertises pretending to be members . Their is no benefit in this for me

I would ask other members what the benefit is for advertises on the board .
And you will have your answer as to why it is so important to theses other

Do what ever you think is right . The market will sort it out . Who ever makes the most wins
go make the most

June 19, 2023
6:22 am
savemoresaveoften
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fat_dog said
that dividend and capital gain . Get preferential tax treatment . Out side a rrsp and tfsa . That interest income dose not that is a fact  

You are just saying the obvious. Does not mean one is better than the other, as you are also confirming. We just wasted band width for nothing 🙂

June 19, 2023
7:00 am
mordko
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are you an advertiser . Do you benefit from theses myth . you propagate ?

Not an “advertiser” but I do benefit from having stocks in registered accounts. As does anyone who understands arithmetic. Telling people to only use TFSA for cash and put stocks exclusively into non-reg = really bad advice.

June 19, 2023
7:44 am
Wrayzor
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fat_dog said
It is my understanding that a person can have multiple Handel on the board . So it may look
like a different members . is that the case with you ?

They say that if you are not paying for some thing on the internet you are the product

are you an advertiser . Do you benefit from theses myth . you propagate ?

It just that it is hard to watch fake news . Or self serving advice for advertises pretending to be members . Their is no benefit in this for me

I would ask other members what the benefit is for advertises on the board .
And you will have your answer as to why it is so important to theses other
 

Not sure if these comments were a response to my post #14 or if they were aimed at someone else. I'll just assume it was me - and I'm not an advertiser, nor am I the alter-ego of anyone else. Just because you don't agree with something doesn't make it a conspiracy.

I know I don't have the street cred on here like someone like Norman1 does, so I don't really expect you to respect what I'm saying. But you could at least have a look at the work that Norman1 has referred you to. Put pen to paper and prove it wrong before disparaging his efforts.

I can tell you that I have benefited from what you call a "myth" in my personal experience with equities in a TFSA. I didn't get the preferential tax treatment but I did get a higher after tax return overall. Your strategies may be different and have different results. And the change in attractiveness of the yields of GICs certainly alters the calculation.

To try to bring this discussion back to the original intent, there are various ways for one to invest in their TFSA based on their goals, risk tolerance, etc. Tax planning plays a role but is not going to be of maximum benefit if you don't want to look at it from all angles.

June 19, 2023
9:54 am
RetirEd
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The preferential tax treatment of equities and dividends is still not as good as the zero-tax treatment in a tax-free portfolio. It only gets attractive if one has fully taxable investments to put in the tax-free accounts and then still has equities and dividends that won't fit. For example:

If one has $10K in TFSA room
$5K in fully taxable assets (GICs and savings accounts, etc.)
$5K in equities and dividends

THEN put it all in the tax-free pile. No tax.

BUT -

If one has $10K in TFSA room
$7500 in fully taxable assets (GICs and savings accounts, etc.)
$7500 in equities and dividends

THEN put the GICs into the tax-fee and then use the remaining $2500 of TFSA room for the best-earning equities and dividends.

The remaining $5K of equities and dividends will get its tax advantage outside the TFSA, but the $2500 that went into the TFSA will do even better.

If one has only fully-taxable (such as GIC) assets, put them all in the tax-free pile.

If one has only tax-advantaged assets, put them all in the tax-free pile.

CAVEAT: you can't take a tax loss in a tax-free investment! Keep things low-risk.
RetirEd
(high assets, low income, big TFSA holdings; I don't worry about income tax.)

RetirEd

June 19, 2023
10:04 am
fat_dog
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I would think most people on this board have their RRSP and TFSA full !

Most people I know do . If you live in poverty . Well their are kinds of considerations . If you do

That is one of the problems you have here . You do not know about the other members

I usually see them as middle class member like myself

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